OVER 20,000 homes have been left riddled with serious faults including damp, mould and fire safety risks under a government-backed scheme.
A damning watchdog report said 98% of properties fitted with external wall insulation under the flagship Energy Company Obligation (ECO) programme are impacted.
The installations, carried out on the Energy Department’s watch, need major repair work, the National Audit Office (NAO) report found.
The scheme was meant to help low-income and vulnerable households who couldn’t afford energy improvements, the NAO said.
Instead, many of them could now face a crisis caused by poor quality installations, inadequate monitoring and weak government oversight.
In response to the NAO’s findings, anti-fuel poverty campaigners warned the system had “let cowboys through the front door”.
The Department for Energy Security and Net Zeros (DESNZ) and Ofgem have suspended the worst offenders and promised to repair affected properties.
Homes in England, Wales and Scotland are impacted.
The NAO urged ministers to take full responsibility for the ECO scheme and explain when and how the problems will be fixed.
Launched in 2013, the programme was meant to help families with energy efficiency.
It worked by forcing big energy suppliers to help low-income, fuel-poor and vulnerable households to heat their homes.
This included actions that result in reduced energy usage, such as installing insulation or upgrading heating systems.
The scheme, funded by the energy companies themselves, cost over £6billion between 2013 and 2022 alone, according to a report by the European Federation of National Organisations Working with the Homeless.
The National Audit Office (NAO) report also said 9,000 to 13,000 homes with internal insulation – 29% of those that had it fitted – have major issues that need fixing.
The report said 6% of external insulation and 2% of internal insulation installations present immediate health and safety risks.
These include poor ventilation which could lead to carbon monoxide poisoning, and electrical safety issues that could cause fires.
Fraudsters were also able to scam millions out of the scheme, the NAO report said.
Last November, Ofgem estimated that retrofit businesses had falsified claims for ECO installations in between 5,600 and 16,500 homes.
They potentially claimed between £56million and £165million from energy suppliers.
The NAO said the failings could be down to work being subcontracted to incompetent firms and individuals.
Businesses are thought to have cut corners and there may have been uncertainty over standards.
The government’s energy department implemented a new consumer protection system for the scheme in 2021, appointing TrustMark – a scheme meant to ensure quality.
But Trustmark failed to alert the department to significant issues with the quality of installations until October 2024.
Gareth Davies, head of the NAO, said the ECO scheme was “important” to tackle fuel poverty.
“But clear failures in the design and set-up of ECO and in the consumer protection system have led to poor-quality installations, as well as suspected fraud,” he said.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “The NAO report reveals a system that has let cowboys through the front door, leaving thousands of victims living in misery and undermining public trust in efforts to tackle the cold damp homes crisis facing many households.”
Minister for energy consumers Martin McCluskey said: “Today’s report shows unacceptable, systemic failings in the installation of solid wall insulation in these schemes, which have directly affected tens of thousands of families.”
He said the Government had taken “decisive action” to protect households and ensure all poor installations of solid wall insulation were fixed at no cost to the consumer.
“We are fixing the broken system the last government left by introducing comprehensive reforms to make this process clear and straightforward, and in the rare cases where things go wrong, there will be clear lines of accountability, so consumers are guaranteed to get any problems fixed quickly,” Mr McCluskey said.
What to do if you’re affected
You may have received a letter from Ofgem, the energy regulator, if you’ve been affected by faulty installations.
But if you haven’t received one, it’s best to contact Ofgem yourself.
Your insulation work will then be quality checked by qualified professionals.
This could include a review of the installation documents or a visit to your property.
If any issues are found, you will not have to pay to get it fixed – the company that originally installed it will be required to fix it for you.
If you have concerns about the solid wall insulation installed in your property under ECO4 or GBIS, or questions about the process for seeking remediation, you can contact Ofgem here:
Freephone 0808 169 444 (lines open 9.30am to 4.30pm, Monday to Friday, excluding bank holidays).
How else can I insulate my home
There are plenty of other safe ways to insulate your home.
You could try adding a layer of mineral wool or sheep wool to your loft or in your roof.
It costs around £900 to insulate a semi-detached home with 270mm of loft insulation, the Energy Saving Trust says.
But it could save you around £230 a year, meaning you would make the cost back in around three years.
Avoid getting spray foam insulation installed as this could actually damage your home and make it difficult to sell.
You can also draught-proof your windows and doors yourself cheaply to prevent heat escaping to save around £40 a year.
A roll of draught insulation tape costs around £5, or you can get a professional in for around £250.
Inefficient boilers can also cost you money on your energy bills.
You can help with this by buying an insulation jacket for as little as £18 to help you save up to £40 a year.
